Quarterly report pursuant to Section 13 or 15(d)

Assets and Liabilities Transferred to Trust Mortgage - 350 Green

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Assets and Liabilities Transferred to Trust Mortgage - 350 Green
 9 Months Ended
Sep. 30, 2015
Business Combinations [Abstract]  
Assets and Liabilities Transferred to Trust Mortgage - 350 Green

4. ASSETS AND LIABILITIES TRANSFERRED TO TRUST MORTGAGE – 350 GREEN

 

On April 17, 2014, the Company’s Board of Directors executed a resolution to form a trust mortgage relating to 350 Green. On May 29, 2014, the Company and EVSE Management LLC (“EVSE”) entered into a Management Services Agreement and on June 27, 2014, EVSE purchased certain assets from 350 Green for total consideration of $860,836 which included a note receivable from Car Charging in the amount of $314,598. On September 8, 2014, the Company entered into an agreement among the trustee of 350 Green, an attorney, 350 Green and the Company whereby the Company would pay the legal fees incurred in connection with an action brought by 350 Green against JNS Power and Control Systems, Inc. (“JNS”). On September 30, 2014, the Company (“Assignor”) entered into an Assignment Agreement with Green 350 Trust Mortgage LLC (“Assignee”), an entity formed by the trustee for the sole purpose to entering into this transaction, under which Assignor, the sole member of 350 Green, assigned, sold and transferred 100% of the limited liability company membership interests in 350 Green to Assignee and Assignee accepted such transfer for nominal consideration of $100.

 

Through April 16, 2014, 350 Green was a wholly-owned subsidiary of the Company in which the Company had full control and was consolidated. Beginning on April 17, 2014, 350 Green was deemed to be a VIE and, therefore, we continued to consolidate 350 Green. On July 8, 2015, the Company and the trustee of 350 Green agreed to settle the note receivable in the amount of $314,598 for $25,000 in full satisfaction of the note. On September 9, 2015, the United States Court of Appeals for the Seventh Circuit of Chicago, Illinois affirmed the ruling of the United States District Court for the Northern District of Illinois in the matter of JNS Power & Control Systems, Inc. v. 350 Green, LLC in favor of JNS. See Note 11 – Commitments and Contingencies – Litigation for additional details. As a result of the above developments, the Company is in the process of periodically reevaluating the nature of its interests in 350 Green, including whether or not the Company has achieved full isolation of the assets and memberships interests of 350 Green, ensuring that the Company could not be required to provide direct or indirect financial support to the former subsidiary or its creditors.

 

The following amounts pertaining to 350 Green are included in the condensed consolidated statement of operations for the three and nine months ended September 30, 2015:

 

    For The Three     For The Nine  
    Months Ended     Months Ended  
    September 30, 2015     September 30, 2015  
    (unaudited)     (unaudited)  
             
Revenues   $ -     $ -  
                 
Cost of Revenues     (148,144 )     (209,086 )
                 
Gross Profit     148,144       209,086  
                 
Operating Expenses:                
General and administrative expenses     25,114       25,114  
Total Operating Expenses     25,114       25,114  
Loss From Operations     123,030       183,972  
                 
Other Income (Expense):                
Interest income     300       6,352  
Gain on settlement of accounts payable     155,770       155,770  
Gain on settlement of debt     314,598       314,598  
Loss on settlement of note receivable     (271,092 )     (271,092 )
                 
Total Other Income     199,576       205,628  
                 
Net Income   $ 322,606     $ 389,600  

  

The following represents the change in the balance of the non-controlling interest:

 

Balance - December 31, 2014   $ (4,400,730 )
         
Net income of 350 Green     389,600  
         
Balance - September 30, 2015   $ (4,011,130 )

 

Accrued expenses pertaining to 350 Green consisted of the following:

 

    September 30, 2015     December 31, 2014  
    (unaudited)        
Accrued taxes   $ 120,132     $ 113,531  
Accrued host fees     -       51,064  
Accrued fees     -       158,021  
Total   $ 120,132     $ 322,616